If you’re a real estate investor dealing in short sales, you may want to acquire new properties sooner rather than later because the latest figures released in June 2016 indicate that the number of distressed properties will dip to pre-2009 levels by mid-2018. In today’s article from The Short Sale Gal Kristine Zelazo, we’ll explore these figures and what they mean for you as a real estate investor.
Number of Distressed Properties is Dropping
According to data released by CoreLogic, it should take about two years for the national short sale rate to reach its pre-real estate market crash level. And while that’s good news for the economy and homeowners in general, it’s not-so-good news for investors who buy distressed properties and short sales.
The latest figures show that distressed home sales, including short sales and REOs, dipped below the 10% mark in March 2016, representing a total of 2.7% decrease since the start of the year.
In terms of total quantity, REOs are now less than one-third of peak levels in January 2009, which peaked at 27.9%. REOs have seen a decrease by 2.4% since the start of 2016.
Short sales, on the other hand, have remained below 4% since mid-2014.
Sales of bank-owned properties accounted for about 6.8% of home sales in March 2016, the most recent figures available from CoreLogic. Meanwhile, short sales accounted for 3.2% of all home sales.
In all, distressed home sales accounted for just under 10% in March 2016. At its peak, these homes accounted for just over 32% in early 2009.
At the current rate of decline, it should reach pre-2009 levels by mid-2018.
Most states — 42 to be exact — have seen a steady decrease in sales involving distressed properties. But a few states have seen more steady REO and short sale property supplies, making these regions ideal for real estate investors. In March 2016 (the most recent figures available from CoreLogic), the states with the highest percentage of distressed property sales were as follows:
- Illinois – 16.7%
- Florida – 17%
- Michigan – 18.1%
- Connecticut – 18.9%
- Maryland – 19.8%
The state with the lowest figures was North Dakota, with distressed properties accounting for just 2.4% of all property sales.
When it comes to the impact on the economy as a whole, the picture is fairly bright according to CoreLogic Senior Economist Molly Boesel who explained, “While distressed sales play an important role in clearing the housing market of foreclosed properties, they sell at a discount to non-distressed sales, and when the share of distressed sales is high, it can pull down the prices of non-distressed sales…There will always be some level of distress in the housing market, and by comparison, the pre-crisis share of distressed sales was traditionally about 2 percent. If the current year-over-year decrease in the distressed sales share continues, it will reach that ‘normal’ 2-percent mark in mid-2018.”
NEED HELP Getting Started in Real Estate Investing?
Getting started in real estate investing can be somewhat challenging, but when done right, you can stand to make significant profits. You’ll have lots of advantages in this regard when you work with a real estate investing and short sale expert like Kristine Zelazo, better known as The Short Sale Gal.
Based in Florida, Kristine works with both buyers and sellers and she is an experienced negotiator. So if you’re an investor seeking to get started in buying short sales and need a great mentor or wish to pursue a short sale transaction for the sale of your property, turn to Kristine Zelazo, the Short Sale Gal!
To get started with selling your home, simply complete the home pre-sale form to provide Kristine with additional information on the property in question. Then, call 786.570.0360.